Running THE STALL

The World Trade Organization (WTO) has ruled yet again on the 20-year-old trade spat between the U.S. and the European Union (EU) regarding growth hormones in beef, but don't expect the EU's market to open up any time soon. In a March 31 ruling, the WTO ruled the EU's de facto ban on imported beef raised with growth hormones goes against global trade rules. The EU was forced several years ago to adjust

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The World Trade Organization (WTO) has ruled yet again on the 20-year-old trade spat between the U.S. and the European Union (EU) regarding growth hormones in beef, but don't expect the EU's market to open up any time soon.

In a March 31 ruling, the WTO ruled the EU's de facto ban on imported beef raised with growth hormones goes against global trade rules. The EU was forced several years ago to adjust its trade policies because of its illegal ban, and it introduced new rules in 2003 based on new science. However, the new WTO ruling rejects the EU's new science as sufficient to continue the ban.

The EU says, however, that WTO — at least in this instance — doesn't have the right to judge whether the EU's new ban was legal. The dispute, which ironically the EU brought against the U.S. and Canada, was only meant to look at whether the U.S. and Canada had the right to continue imposing retaliatory tariffs on its products for its earlier ban on hormone-treated beef that dates back to the 1980s.

Both countries introduced 100% tariffs on dozens of European products such as chocolate and truffles in 1999 to the tune of US$116.8 million and CA$11.3 million. In the March 31 ruling, the WTO ruled that even though those tariffs were appropriate because of the EU's old ban, they weren't valid for the ban the EU introduced in 2003.

So, in essence, the U.S. and Canada are meant to come up with new tariffs against the EU that are appropriate for the new 2003 ban.

Citing precaution

The EU's new rules came about in October 2003 with a scientific report it claimed proves one of the six most commonly used growth hormones in beef cattle causes cancer and damages human genes. For the other five hormones, which it was unable to find conclusive proof of specific harm to human health, the EU invoked the “precautionary principle,” which is akin to “when in doubt, don't.” The EU uses the precautionary principle for its ban on genetically modified organisms (GMOs), as well.

Yet despite the retaliatory tariffs on EU products, the EU isn't about to back away from its growth-hormone stance, according to a European Commission source, even if the U.S. and Canada institute more retaliation measures. The EU reviewed its policy again in 2007, and the European Food Safety Authority agreed the 2003 law was based on good science and should remain.

According to Peter Hardwick, head of meat services for the United Kingdom's (UK) Agricultural and Horticultural Development Board in Brussels, the situation is mostly a lack of consistency.

As an EU member state, the UK must abide by EU trade rules, Hardwick says, but the UK view is that science should be used to make decisions on food safety, whether it is BSE, growth hormones or another risk.

Though the majority EU view is that the science regarding human risk from beef hormones is unproven, one can't carry on forever waiting for science to show something different in 30 years, he adds.

“If we hadn't adopted penicillin because in the future people might develop a resistance to antibiotics, a lot of people would have died,” Hardwick says.

The spat continues

So the stage is set to get even more complicated, and the trade spat will continue for several years without a resolution. The U.S., EU and Canada can appeal the March 31 decision, and Canada has hinted it might.

But even without an appeal, it's likely either the U.S. or Canada will seek a resolution from the WTO on the EU's 2003 ban. That process could take several more years, considering that the March 31 ruling was a result of an EU complaint in 2004 and may only be resolved by summer if either of the three countries appeals this latest decision.

If the U.S. and Canada were to bring a new complaint against the EU's 2003 ban before the end of 2008, it could take until 2012 for the result. Only then could the EU be forced to change its rules on beef growth hormones — a process that could take several more years — and may be similar to the one it has now.

So in short, U.S. beef producers looking to boost exports to Europe shouldn't wait for the EU to change its rules. It would be quicker to just join the Non-Hormone Treated Cattle program.